Charlotte-based Atrium Health is receiving about $191 million in federal grants designed to help health care providers respond to the coronavirus, according to a data analysis by research group Good Jobs First. Critics say the hospital system doesn’t need the money.
An Atrium spokesman said in an email that the funds, part of billions in federal relief included in the Coronavirus Aid, Relief, and Economic Security, or CARES Act, will be used to partially offset “sizable losses” caused by the pandemic. The hospital system stopped non-essential surgeries and appointments in mid-March to prepare for an expected surge in COVID-19 patients. It recently resumed those procedures.
Atrium reported a $30 million operating loss for the first quarter of 2020 at its May board meeting.
“Thirty million dollars is peanuts,” said Robert Berenson, a health policy analyst at the Urban Institute, a research group in Washington, D.C.
He said wealthy hospital systems like Atrium may lose revenue in the first and second quarter of this year, but said the losses are “nowhere near” the money they have in reserves. Atrium had nearly $5 billion in its investment accounts in 2018, according to its financial statements.
“They are fully capable of continuing quite well, thank you very much. Even without this federal infusion of cash,” Berenson said.
Berenson said Atrium and other wealthy hospital systems got more money than they needed. He blames the formulas the federal government used to distribute funding. One of those based the amount of money awarded on how much money a health care provider collected from Medicare in 2019. Another was based on a provider’s revenue.
“This simple formula used the data on-hand to get the money out the door as quickly as possible,” the U.S. Department of Health and Human Services said on its website.
But hospitals that serve a greater proportion of wealthier, privately insured patients got twice as much relief as those focused on low-income patients with Medicaid or without insurance, according to a Kaiser Family Foundation study.
In North Carolina, the top four largest recipients were big systems -- Atrium, UNC and UNC Health, Novant and Duke -- according to Good Jobs First data. They received about $526 million combined.
“Is that relief funding getting to those -- everyone needs it -- but those who most need it? I think that is an open question,” said Brad Staats, faculty director of the University of North Carolina’s Center for the Business of Health.
Staats said hospitals across North Carolina saw dramatically fewer patients because of the coronavirus but he said bigger systems have a larger “rainy day fund.”
“If you’re kind of the big hospital systems -- you know, an Atrium, a Duke, a UNC -- then you’re getting hit hard but you’re likely able to weather the storm," he said. "The real threat -- or the biggest threat -- comes for the small systems, especially for rural hospitals.”
Staats said many rural hospitals had fewer patients to begin with and have lost procedures that brought in more money.
“They, over time, have lost a lot of those more profitable procedures as folks have gone to a big city to get their heart care or to get their orthopedic surgery,” Staats said.
North Carolina had at least 32 small rural and critical access hospitals in 2019, according to state health department data. Most rural hospitals in the U.S. had little cash going into the pandemic -- some with fewer than 21 days of cash on hand, according to an analysis from the NC Rural Health Research Program.
Small and rural hospital systems received federal money but Berenson with the Urban Institute called it a “pittance.”
First Health of the Carolinas, which operates four hospitals in Pinehurst, Troy, Rockingham and Raeford, got about $14 million, according to Good Jobs First data.
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